Now to the Ukraine. Another dramatic escalation overnight. Some of the worst violence since the conflict began. New fears that Putin will invade. Muhammad Lila is on the scene. In eastern yukraine with the latest. Reporter: It's the most dramatic escalation of violence since the crisis began. Overnight, tanks and troops moving in to a town held by pro-russian separatists. Just hours earlier, this woman saying, I feel terrible. I'm in my own country. My own army is taking action against me. In the areas to the east, they have lost control. This after demonstrators set fire to a pro-russian separatist head quarters. At least 31 people dead. Most of them burned alive. The fighting now so serious, overnight, America's former ambassador to Moscow admitting, this is real, this is war. The 600 American troops being sent to neighboring countries in case of a wider conflict. Meanwhile, as we have seen firsthand, pro-russian checkpoints are popping up everywhere. The commander here making the threat obvious. He's said he can't guarantee our safety if we cross this check point. So we're taking a risk if we go through. The question now, what will it take for all of this violence to come to an end. The acting prime minister says we're in the most dangerous days of the conflict. Putin is demanding that Ukrainian troops retreat. Separatists say they'll go ahead with the referendum in one week. If they vote for Independence, no telling what happens next. Thank you, Muhammad Lila for that. Let's bring in Martha Raddatz. And Jon Karl at the white house. Martha, let me begin with you. The comment by Michael Mcfall, the former ambassador this is real. Really striking. U.s. Officials don't know how far Putin wants to go. Does Putin want to stir up trouble or invade? We don't know. With such a dramatic escalation over the weekend, with all of the fighting, so much concern about whether this turns into an all-out war. I was in eastern Europe last week. I was with the U.S. Forces training Latvian and Lithuanian troops. The general in charge says he's very concerned that Russia will go into eastern Ukraine. If that happens, you'll see a lot more troops in our nato allies in the countries like Lithuania and Latvia. And Jon, one of the things we have seen with this struggle over saxs, are the United States has limited means to deter Putin. No question. But the white house is prepared to lower the boom of much broader economic sanctions than we have seen so far. Targeting entire sectors of the Russian economy. They believe Russia will go along if Russia invades, that Europe will go along if Russia invades. Here's the thing. White house officials say these sanctions could be triggered without a Russian invasion. If the Russian separatists group do anything to disrupt the presidential elections scheduled for later on this month in Ukraine. The president has acknowledged there is no guarantee sanctions will work.

This transcript has been automatically generated and may not be 100% accurate.